Willits and Brooktrails take off the brakes, on collision course

The most recent out-of-court efforts between Brooktrails Township and the City of Willits to settle differences involving sewer plant payments have come crashing down in a flurry of paperwork and the threat of a new lawsuit.

In recent months the two sides have had elected members of each organization meeting in secret negotiations to try and settle their differences and avoid a more costly trial.

City negotiators proposed an "integrated, global and final resolution of all present claims and disputes" on November 15 to the Brooktrails board. The main issues addressed in the proposal: Brooktrails would pay $285,386 for the Niesen land purchase; adjust the percentage paid by Brooktrails for operational costs from 23.6 percent to 19.2 percent; Brooktrails would agree to pay 35 percent of the currently unsigned "fifth amendment" to the joint contract associated with the last $8.3 million loan for sewer plant construction. In return, the city would agree to provide advance notice to Brooktrails of any capital improvements in excess of $25,000; certain accounting agreements; annual meter maintenance. Both parties would dismiss all lawsuits and claims; and Brooktrails would pay its share of all city expenditures previously challenged associated with the sewer plant project. The council acknowledged the existing contract would then need to be amended to reflect these changes.

Brooktrails countered on November 28 by presenting an actual comprehensive contract amendment reflecting most of the city's requested elements. In its counter offer Brooktrails General Manager Mike Phelan stated: "This proposal is presented in the form of an agreement to eliminate ambiguities and is intended to address all issues in a thorough and comprehensive manner. In fact, if accepted by the city, Brooktrails officials are authorized to execute the proposed agreement. At the same time this is not presented as a "last, best, final offer." The Brooktrails board, through the ongoing elected officials negotiations process, is ready to explain the proposal and to consider ideas to resolve any differences on the details."

On December 19, new Willits Mayor Holly Madrigal, sent new Brooktrails President Tony Orth a letter stating: "We regret that Brooktrails did not accept the global proposal that the city made following the mediation discussions which Bruce and I had with Rick Williams and George Skezas. While we appreciate the effort which Brooktrails made to put together a counter proposal, the city council unanimously rejected the same.

"Based upon the terms of the counter proposal, it appears that Brooktrails is heading in a different direction from those discussed at our last efforts."

In December, the city billed Brooktrails $200,248.74 for its six-month share of all loans provided by the US Department of Agriculture for the new sewer plant, including the payments covered by the unsigned "fifth amendment" to the contract. Brooktrails paid the city $51,592 instead on December 27. Brooktrails deducted its prior payments for the loan covered by the fifth amendment and withheld any new payments on the disputed loan.

On December 28, Brooktrails advised the city it now believed a section of the contract's second amendment allowed Brooktrails to revise the contractual basis for calculating ongoing reimbursement for operating costs. Brooktrails has been requesting for some time for the city to provide an actual dry weather flow capacity for the new plant. This capacity has been a key element of past calculations of Brooktrails payment obligations. Since the city repeatedly failed to provide the information, Brooktrails hired a contractor to calculate it instead. The new calculation would significantly lower the future Brooktrails payment obligations.

On January 4, Willits City Manager Paul Cayler sent a letter to Phelan warning that Brooktrails failure to pay the full $200,248.74 billed would "leave the city with no option but to file a lawsuit against BTCSD to collect not only the balance due, but interest and attorney's fees and costs."

On January 8, via email, the city received a letter from Phelan saying "the last offer transmitted by me reflected a serious effort on my part to create a mechanism designed to resolve the dispute. I was disappointed that the city chose not to continue the negotiations. I am disappointed that the city is threatening further litigation to collect a payment that is not a contractual obligation and is apparently not needed by the city."

In closed session January 9, the Willits City Council unanimously authorized its attorney to "demand to cure the breach" of contract with BTCSD per paragraph 23 of the joint contract.